Tag Archives: Demographics

A great deal is being said on the geopolitical and security fronts; they warrant this short piece. Terror attacks; migrant crisis; resurgence of extremes; demagogy and populism; isolationist tendencies and calls for trade barriers and secessions, the world’s public discourse is rife with them. We feel that we are in the midst of some major geopolitical transitions, and as it is often the case with geopolitics and the media, there are determining trends that are addressed only too little; they are, for the most part, of a socio-economic nature. Five trends underlie most of the current geopolitical rhetoric in my view.

The first one of those trends may seem at odds with the news: wealth is rising globally, mostly driven by the economic development and increased technological penetration in several populous countries in Asia and emerging markets. The world’s economic centre of gravity is moving back East, after having moved constantly West from the Renaissance to the Industrial Revolution and the economic rise of the USA. In fact, the largest part of this economic shift has already taken place and it explains the commodities super cycle that we had witnessed globally and which has come to a rather abrupt end 5-6 years ago. A slower continuation of this shift East will follow now, that is until India, if at all, undertakes the same type of economic breakout as China, at which point this centre of gravity will accelerate further East again. Given the large populations of Asia, all of it means that the world is, in general, getting less poor and less underdeveloped – and this is rather wonderful.

The second important trend is the dominance of the services sector in the economies of all developed nations. We live in a world where services constitute more than two-third of the economic output of developed countries, even those countries with reputed manufacturing sectors such as Germany and Japan; and with the continued automation, interconnectivity, and advancement of artificial intelligence, this trend towards more services is likely to continue. French farmers may pursue their protests, but it will not change much to the fact that agriculture is today only a small and decreasing percentage of the economies of all developed nations.

By combining the first and the second trends, we can easily see that the West, Japan, and China, among others, are becoming less dependent on foreign commodities, in relative terms to their past, even if some of them still need to import a great deal of them for their economies to function properly. It explains the current economic struggle of many commodity-exporting countries, as well as the wish for a geopolitical ‘pivot’ of the USA and Europe out of the Middle East and Africa towards the Pacific region.

A substantial percentage of the population of advanced economies is getting older and retiring; this is the third important trend. As this generation of ‘baby boomers’ is both the holder of the greater part of the wealth in developed economies and the one that requires the most of the state benefits of pension and healthcare, the political landscape in developed countries has become divided and deadlocked; and should we add to this observation the job losses in low-skill sectors as a consequence of the first and second trends, we see how it all converges to lead to a rise in income and wealth disparities in developed nations, despite the global economic prosperity. Populism; tendencies to retrench; inability to reform social contracts on pension and healthcare; changes to taxation as a way of transferring wealth from one group to another; and blame games (e.g. against the rich, the bankers, or foreign migrants), all become effective political means for garnering votes. Many people want to change the system drastically; many people feel the need to blame or attack someone; but different social groups have, simply, contradictory views on how the economic systems should be changed, given their conflicting priorities. Opposing extremes emerge, and the traditional political parties see themselves stuck in the middle.

The Middle East, Central Asia, and Africa have high number of youth coming to the job market, and most societies in these regions are having great difficulty adjusting to the pace of demographic change, which is fuelling tensions, inequalities, and political disillusionment. Things are only made worse by the traditional reliance of these regions on the export of commodities at times where the developed world does not need them as much anymore and, therefore, is not as interested in intervening politically in these countries as much either. When a great number of young people are looking for subsistence without finding one, it almost always results in tectonic shifts within a country. Moreover, the failure of most countries in the Middle East at effective economic and political self-governance since the disintegration of the Ottoman Empire, the chaos of the Iraq war, and the missed chances at democracy following the Arab Spring, all add to the mix of political tension, which seems to be reaching its apex in our days. The result is a wide geography marred by 1848-like revolutions mixed with Thirty Year War-like sectarian strife. One ought to say that continental Europe also missed its chance at democracy immediately following its populous revolutions, and it is only in the late 19th century and early 20th century that democracy started to effectively take hold in it. As the problems worsen and the chaos endures, anarcho-nihilist and destructive movements start to attract more in the youth. Not finding their place in society, some in the youth start to wish only for the destruction of everything, including their own person; they are joined by some of the marginalised youth in the developed world. In this particular case, the anarcho-nihilist ideology is wrapped in religious cloth for further validation. Furthermore, given that most of the troubled countries belong to a religion distinct from that of the developed world and, we must admit, have a long legacy of conflict with it, the tension becomes quickly a global religious one. The US and Europe want to disinvest themselves from the Middle East and Africa towards the higher priority regions of East Asia, but, in an integrated world, the troubles coming from these regions will not allow them to easily escape from the challenges.

And finally, there is the salient fifth trend of rising expectations about what constitutes good lifestyle and good livelihood. With the fall of barriers of information and, hence, of barriers to social comparisons, there has been a sharp transformation of expectations about what constitutes a successful and worthy life. Something has outrun even our technological advancement and our economic prosperity, and it is our expectations about how easily and fast technology and economic prosperity should be delivered to us; they have become, simply, unachievable. We cannot all become billionaire tech entrepreneurs or multimillionaire fashion icons; we cannot all have the latest supercars and the finest luxury items; and we cannot all afford traveling the world constantly looking for new entertainment. And yet, this is what is being ‘sold’ to us everyday due to the fall of barriers of information. With the fast penetration of technology in our lives, we have witnessed great gains in productivity, but also certain complacency towards the ‘more… faster… now…’ I reckon that a large part of the economic malaise about which everybody seems to be talking – whether in the US, Europe, or China – can be explained not by economic figures, but by the run of material expectations of most people; it stands at odds with the wonderful prosperity and technological democratisation that the world has realised over the past decades. This run of expectations, mirrored by the incessant leveraging to meet them, is, in my view, the most alarming of all trends; it represents a dangerous potential of destruction from within. Often, we do not realise how good we have it until we lose it – ask any pre-war generation.

If we combine the third and the fifth trends, we explain a great deal of the anger at the domestic level; and if we combine the first, fourth and the fifth trends, we explain a great deal of the anger at the global level.

As these trends evolve or dissipate, and many factors can come to influence each, so will the doomy political rhetoric, the dissatisfaction, and the incessant promises of something unattainable. The reasons behind the current geopolitical trends are understandable, and their roots are less sensational, of a general conspiracy kind, or of a tribal/clash-of-cultures kind. Unfortunately, violence and the fear of other draw more interest than cool observation; too many in politics and the media take advantage of this fact without a shred of self-respect. But that is nothing new in human history either.